Restaurant management: 91% is automating the back of house. “Where to start?”
You can’t imagine a food and beverage business without an ePOS or online ordering system. Without these solutions, the data you use to keep the organisation on track would be hidden in dozens of spreadsheets scattered throughout the company.
It’s impossible.
Oddly enough, more often than not, that is precisely the situation at the back of the house.
In many foodservice and hospitality operations, the back of house is a digital wasteland.
Even in multi-site enterprises, spreadsheets and email rule the roost. And they hamper growth in a big way. They are slow, hard to update and prone to errors because of the many manual actions.
But that’s about to change.
In ‘The Future of Restaurants Report’ Square predicted that in 2021, 91% of restaurants have made, or plan to make, investments in kitchen automation technology. Keep in mind that the report came out before the global pandemic.
Real-time insights
The fact that digitalisation would take off in the hospitality industry was an easy one to predict.
You only have to look at related industries, to know that data-driven management has become the new norm. At Tesco, the supply chain manager doesn’t walk around the warehouse with a clipboard counting cans of tomato sauce.
Inventory management is simply too crucial to profitability. And too big a responsibility to be shouldered by one person with a spreadsheet. Retail companies need real-time insights into their stock. Digitalisation allows them to better manage peaks and troughs and avoid losses.
8,400,000 euros per year
In an industry where margins are razor-thin, like foodservice, it can mean the difference between “having room to grow” and “barely making ends meet”.
Foodservice outlets that buy too little will have to disappoint customers. The ones that purchase too much see their food cost (and carbon footprint) explode while the margins shrink.
So when it comes to digitalisation and taking control of procurement, the food and beverage industry could not fall behind. The impact on the bottom line is simply too significant.
Pieter Wellens, chief technology officer of F&B management platform Apicbase, explains:
“One of our customers has 20 locations. Per location, their F&B purchases average 35,000 euros per month. That’s 8,400,000 euros per year. Those aren’t figures you would feel comfortable managing in a spreadsheet, right? The restaurant company uses our software to track and improve the entire cycle from menu engineering, food cost management, inventory management to procurement.”
Theoretical ≠ actual margin
Ultimately, digitalisation and automation are about being in control.
It’s about knowledge. While we know exactly which customer ordered what, we know only approximately how much that order cost us.
The monthly P&L will show a profit, but not whether the margins could have been higher. You can’t tie the P&L to the product. It doesn’t tell you if the actual dish margin matches the theoretical margin. Nor how much you are away from your target.
“The chief quality officer of a fast-casual chain once told me the following,” adds Carl Jacobs, CEO of Apicbase. “He said, last year, 100,000 euros of F&B stock simply vanished. I don’t know what happened to it. We prepare everything fresh. So, inevitably we have to throw stuff out at the end of the day. But does that explain such an amount of money wasted? Or was it over-portioning, theft…? I don’t know, but I have to know.”
Related article: 7 Causes For Variance Between Your Actual and Theoretical Food Cost.
For those who want to scale
An old expression says: when the water in the river is high, nobody worries about the invisible debris under the surface that’s preventing a smooth flow.
Until things start to go wrong.
At that point, understanding what’s happening in the backend allows you to move quickly and get the numbers back on track. Companies that want to scale have to understand their spending in detail.
Only then will they have insight into the processes that precede profit or loss. And only then can you start optimising for growth.
In an interview, Peter De Clerck of Antwerp Boulevard, a food & beverage concern with four large branches, said that he once calculated the cost price of the complimentary nuts they served. It turned out that the small bowl of nuts accompanying the drinks cost the company 12,000 euros per year. So, no more free salty nuts. And there was also an additional benefit: sales of chips and snacks skyrocketed.
Data-driven management — where do I start?
The digitalisation of the back of house begins with a central database for your recipes.
That’s the most important thing.
That way, you can automate KPI calculations, which saves your employees hours per week on admin. Plus, staff in newly opened locations have immediate access to recipes, ingredients and cost calculations.
It allows you to scale faster because having all information accessible in the cloud speeds up the onboarding of new staff without overloading the current team with extra work.
You then connect your suppliers to the ingredients.
That way, every location can order directly from pre-approved suppliers. Next, you integrate your ePOS-system, so stock levels are updated automatically. At this point, you know who purchased what, when and why. Finally, you incorporate the production module.
Now you have complete visibility of the entire production and supply chain at every location. And you are managing the operation based on the actual numbers and no longer on slow spreadsheets.
Related article: Point Solution vs Platform: What Is The Best F&B Tech Strategy For Your Multi-Site Restaurant?
Only for McDonald’s
In the past, end-to-end solutions like this were only available to McDonald’s and the like.
They had the resources to develop their own complex software solutions. Today SaaS companies (Software as a Service), like Apicbase, offer equally powerful but much more user-friendly tools for an affordable subscription plan.
